‘Regressive’ loan changes seen as hobbling Augar’s prospects

Sector leaders have questioned the prospects of a future Conservative government implementing the recommendations of the review of post-18 education in England, highlighting that the perceived “regressive” nature of changes proposed to student loans could tarnish the report.

On higher education funding, the report called for fees to be cut to £7,500 by 2021, with the Treasury replacing lost fee income “in full”, directing public spending towards high-cost subjects.

Sir Chris Husbands, vice-chancellor of Sheffield Hallam University, said the report was “a really sophisticated piece of work”.

But it was “quite difficult to see where [the review] goes” politically, he added. “We are not going to get a proper three-year spending review in the autumn [because of continued Brexit uncertainty],” Sir Chris said.

“In that sense, it’s arguable that a good deal of Augar’s recommendations are out of scope because they don’t come into play within the one-year spending review we’re going to have.”

Philip Hammond, the chancellor, said in response to the publication of the report that “we won’t be able to prioritise every area” and noted that continued Brexit uncertainty would require continued spending restraint.

Sir David Bell, vice-chancellor of the University of Sunderland and a former permanent secretary at the Department for Education, described the chancellor’s response as “remarkably lukewarm”.

“It will be interesting to see what the tension is between a policy drive – if there still is a policy drive [after Theresa May steps down as prime minister] – to get the fees lower, against a Treasury push not to generate any additional top-up [funding], or perhaps not to meet the top-up requirement in its entirety,” said Sir David.

Gordon McKenzie, chief executive of GuildHE who worked on higher education policy and funding as a senior civil servant, said: “Personally, I think the chances of getting this change [lower fees] through the current Parliament are slim to none.”

There are “a number of high-profile, Conservative ex-ministers as well as Labour against it” and many in Parliament “would want some pretty cast-iron assurances about the teaching grant being topped up in full”, he added.

In addition, Mr McKenzie said that “by extending the [loan] repayment period to 40 years…it means the whole package can be characterised as a tax cut for wealthy graduates at the expense of low and middle earners, and that’s really not great politics”.

Sir David noted critical comments by Martin Lewis, the highly influential founder of the website Money Saving Expert. “If the Martin Lewis narrative sticks that this is not a good deal for lower- and middle-income graduates…then I think politically that’s quite a difficult issue for the Conservatives,” he added.

Sir Chris highlighted that the effect of freezing average per-student funding for three further years to 2022-23 “gives the sector a 12 per cent, possibly 14 per cent, efficiency saving over the next three years”.

That is “a really tough challenge”, amounting to “delayed austerity” for the sector, he added.

This cut would prompt some universities to step up international student recruitment, Sir Chris suggested. “I suspect that some of the middle and top of the Russell Group will probably be thinking, ‘Right, we need to cut back on home recruitment because it doesn’t pay.’ The incentives are stacking up in quite unhelpful ways for parts of the sector,” he said.

Sir David said the report “really does repay further study. But maybe in the end it will be all tied up with grand politics rather than HE policy.”

john.morgan@timeshighereducation.com